The Chancellor said "very good progress" had been made in Brussels towards
solving the immediate Eurozone crisis, but stressed that the UK would not
directly pay into the bailout fund.

Updating the House of Commons after meeting with European finance ministers in Brussels, George Osbornesaid that "very good progress" had been made towards striking a deal, but much detail remained unresolved.

"Having put pressure on the Eurozone to get this far, we have to keep up the pressure to get the details completed," the Chancellor told MPs. "They have started down the right road and now they have to finish the job."

Officials in Brussels said that after ten hours of negotiations a deal had been reached with banks on a 50 per cent write-off of Greek debt and they also approved a complex mechanism to boost the Eurozone's main bailout fund to €1 trillion (£880 billion). Coupled with an earlier decision to recapitalise vulnerable banks, the summit therefore delivered on the package it promised.

Mr Osborne said Britain stood ready to consider the case for further contributions if necessary, but only to increase resources made available by the International Monetary Fund (IMF) to all countries of the world, not just for the Eurozone.

The UK had already taken such steps, Mr Osborne said, because "the ultimate lesson of this crisis is that unless you can pay your way in the world and compete around the globe, your country will be next in the firing line - and I'm determined that our country will never be in the firing line."